Premiums in Medicare Advantage Plans To Decrease Slightly in 2011
On Tuesday, CMS Administrator Donald Berwick said that premiums paid by the 11.3 million beneficiaries enrolled in private Medicare Advantage plans will decrease by about 1% on average in 2011, the New York Times reports.
According to the Times, the announcement "came as something of a surprise" because some lawmakers and health policy experts had predicted an increase in MA premiums (Pear, New York Times, 9/21). MA premiums increased by 15% on average in 2009 (McCarthy, CongressDaily, 9/21).
Medicare officials said the reform law gave them a stronger stance in negotiations with participating insurers, which they used initially to reject about 300 plans. Berwick said, "These plans unfairly proposed to increase out-of-pocket expenses for beneficiaries while increasing their own profit margins," adding, "We said, 'No, you have to do better.'"
Ultimately, the plans in question "improved their benefits by $13 per member per month, or 5%, on average" after negotiations, Berwick said. He noted that seven plans did not change their bids and subsequently were denied (New York Times, 9/21).
John Gorman, CEO of consulting firm Gorman Health Group, said officials gave insurers "a beat-down" during negotiations. He said, "This was night-and-day different from the Bush years" (Reichard, CQ HealthBeat, 9/21). Gorman added, "Insurers succumbed to the government's demands and stayed in the Medicare market because they have become much more dependent on Medicare business" (New York Times, 9/21).
Announcement Counters GOP Criticism
Berwick's announcement counters Republican criticism that changes made to the program by the federal health reform law would cause some insurers to leave the program and others to charge seniors higher premiums with reduced benefits.
Berwick said, "Despite lots of predictions of doom and gloom, seniors will have more robust Medicare Advantage and prescription drug benefits" because of the health reform law (CongressDaily, 9/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.